Rick C. Hodgin, 27th February 2009

Silicon Valley - California's Air Resources Board voted unanimously yesterday to regulate "some of the most potent gases produced by the semiconductor industry, which makes chips for cell phones, computer and cars." Some of the gases in question are fluorinated gases, which reportedly have a 23,000 times greater greenhouse effect on the Earth than does CO2.

Board chairman, Mary Nichols, said, "The chemicals are highly potent greenhouse gases. It's important that we begin the process of phasing them out."

The new measures are estimated to cost some business nearly $40 million to retrofit existing equipment with gas capture or reduction technology. This significant fee comes at a time when many companies are seeing their profits decrease.

Recognizing this reality, John Greenagel, a spokesman for the Semiconductor Industry Association (based out of San Jose, California), said, "To the extent California makes it more costly, more cumbersome to operate here, you're not going to attract these facilities in the future."

The regulations will not take effect until January 1, 2012, however companies must be compliant by that date meaning expenditures in 2010 and 2011.

The reductions in these types of semiconductor-company greenhouse gas emissions account for less than one percent of California's target provided for by the 2006 "global warming law" which intends to significantly reduce greenhouse gas emissions by the year 2020.

Gus Ballis, manager of the American division of the global NEC Electronics company, one of California's largest manufacturing facilities, has reported losing millions of dollars per month during the recession. Ballis said, "The financial impact is going to be severe and affect our ability to be competitive in the market. We're potentially on the chopping block -- whether they are going to keep us or pull our production back to Japan."

Semiconductor companies have voluntarily agreed to reduce fluorinated gas emissions by 10% compared to 1995 levels by next year. However, California is calling for a 56% reduction by 2012.